News flash: your rent is negotiable.
The rental market today looks drastically different from what it did a few short (or long, depending on who you ask) months ago. With many people leaving cramped cities for space and fresh air in the suburbs, landlords and management companies in urban centers are doing everything in their power to attract and retain as many tenants as possible.
The good news? If you’re a current tenant with a lease up for renewal soon, or looking to move into a new apartment altogether, you could have some bargaining power.
For example, almost 35% of apartments for rent in Manhattan were discounted in the second quarter of the year, according to real estate site StreetEasy. The median rent in the quarter was down by a record 6.7%, or $221 less than the previous quarter. In fact, rents in Manhattan, as measured by StreetEasy, fell for the first time since the Great Recession.
It’s not just New York, either. The median price one-bedroom rents in San Francisco has dropped 14.1%, in Washington D.C. 10.5%, and in Boston 8%, according to rental-listing site Zumper.
With a little bit of strategy, you could end up knocking some money off the proposed rental price of your dream apartment or current home. Here’s how to do it.
First things first: Ask! If you never ask your current or prospective landlord, you’ll never know. Be polite and friendly, and say something along the lines of:
“Is this rental price open to negotiation or discussion, especially given current market conditions?”
The worst thing they can say is no — but again, they want to have as many people occupying their apartments as possible. This advice worked for me personally when I was negotiating the terms of my apartment renewal in Manhattan, and I was able to save a significant amount off my monthly rent.
If you’re in the market for a new place, you’re going to want to negotiate prices on everything you see. “It’s a renter’s market right now,” says Cash Jordan, a New York City real estate expert.“With so many vacant apartments, if you aren’t offering lower rent than the asking price, you will likely end up overpaying.”
Most landlords are willing to negotiate, so no matter what situation you find yourself in, it certainly can’t hurt to ask.
Before you go into any negotiation process, you’ll want to do your homework. Research similar apartments in the area; bonus points if you can find ones in the building that are significantly cheaper than the unit you’re living in or looking to rent. The best tools to find out are sites such as StreetEasy, RentHop and Naked Apartments.
This can be particularly effective for negotiating a lease renewal. “Check online to see how available apartments compare,” Jordan suggests. “If the rental market is offering similar apartments with lower rent than you have now, it means you can move and save money. Make your current landlord aware better options exist so they know lowering your rent is the only option to retain you as their tenant.”
Before you ask for a rent reduction, do your research. Look online for cheaper places in the area and let your landlord know you have options.
During the conversation with your landlord, mention how you would love to stay in your apartment, but there are other deals in the area available that you would have a hard time turning down unless the landlord is able to make a compelling offer.
Always do market research first, agrees Kendall Philbrick, a personal finance blogger. “Figure out what other apartments with similar amenities are going for in your area,” she says. “If you can, get it in writing. That way, your landlord is aware that you have other options,” she adds.
If applicable, you’ll also want to mention you’ve always paid your rent on time and haven’t had noise complaints, for example, to show why you’re an ideal tenant. It’s much more of a hassle for landlords in the long run to find a new tenant altogether, so reminding them of this makes your argument even stronger.
Here’s where things can get interesting. If you can afford to do so, it could be worth offering to pay the first few months up front — that way, you can show the landlord that you have the financial wherewithal to make the rent.
You might also want to consider asking for an extended lease, too. They may give you a month or more free on an extended lease, which in turn lowers the amount you end up paying per month.
Philbrick also suggests offering additional value to your landlord if applicable. For example, if you’re a handyman or expert gardener, you could offer your services in exchange for lower rent. Her advice is to go through the lease and find things the landlord is responsible for. If you’re able to, offer to take some of those things off your landlord’s plate.
Being flexible will help both of you come to a mutually beneficial agreement.
Have Your Desired Outcome in Mind
A key part of any negotiating strategy is having your ideal scenario in mind.
In this case, it could be lower rent, a month or two free, free parking, free amenities — the list goes on. You’ll want to have that scenario in mind before you even ask the landlord if there’s room to negotiate the lease.
You’re going to want to know the market as it relates to your housing needs, Jordan says. That will give you the confidence to negotiate and, if needed, to walk away from an overpriced apartment. Market knowledge will also prevent you from getting talked into something that’s “a lousy deal,” he adds.
If the landlord won’t budge, it’s always good to have a backup plan in mind. Will you look for another apartment altogether? Will you stay where you are? These are important questions you’ll want to answer before you head into the negotiation.
“Ultimately, savings will vary based on location, apartment size and amenities,” Jordan says. And knowing what really matters to you in a place to live may be just as important as having a price range in mind.